3 Questions to Ask About Your Business Idea
This is the second episode in our series So You Want to Start a Business. In this episode we’re going to discover the three simple questions you can ask yourself that will let you know if your idea is a good one.
Now what would you do if you had a great idea and you invested a fortune in an idea and you marketed heavily over a period of actually three or four years in that idea, but it just didn’t work. At the end of the time your business just collapsed.
Here’s the story of someone who did just that and why his dream was destined to become a nightmare from the very beginning, it had no chance of success ever.
In the first episode we’re talking about knowing what your idea is and if your idea is a good one. A good idea actually can be qualified in your head, you can think something is brilliant idea because you thought of it, but business speaking, there are some simple things you need to take a look at, a serious, honest look at, and this is what we’re going to talk about in this episode, how to know if your idea is a good one. It may be well thought out, it can be well-planned, but that’s not going to be enough to make your business idea a success, neither is well-funded. In the story that I’m going to tell you in just a minute this man invested a huge amount of money, I mean a lot of money, and it still didn’t work.
This is the tale of an ill-conceived, unqualified idea from the beginning. This guy came to me as a client and he’d already been at this five years. I didn’t help him in the beginning; if I had, I can guarantee you this would not have happened. But he didn’t come to me until five years into his business. He had an idea for something that was in the sports field that he had invented, and he thought it was a brilliant idea, that it would help people in this certain sports field improve their game, do fabulously well, whether they were amateurs or pros. He put a huge amount of money developing prototypes, I mean a fortune. Even working with some companies in China for a possible fabrication and manufacturing of these devices, spent a lot of money. And it just didn’t work. After a period of time this was a failure. Because he spent a lot of money before he qualified the idea.
I’ve met a lot of people saying well, we haven’t spent enough money in order to make this work. While you do have to spend money and you do have to invest capital, but if it’s a bad idea it’s throwing that money down the drain, it’s not going to go anywhere and that was the case of this one. If you’re ready for this, he spent US$60,000 for prototypes and for marketing. And after five years he had sold not one, not one! After five years, $60,000, not one sale.
So I asked him a very simple question, what problem does this solve?
His answer was amazing. He said, “I don’t know.”
$60,000 and he had no idea what this product actually did, because he did not understand the very basic premise of a successful business…
and that is problem solving.
When I owned a millwork company, I had a lot of guys work for me. They thought they were building furniture or molding, or doors, or windows, or trim. But they were wrong. I said we are not making anything, we’re solving problems. People come to us with something that doesn’t work or something they need and we’re going to fix that problem for them, because that’s true about business.
And so if you don’t know what problem your business or business idea will solve, who does?
I asked this gentleman that. If you don’t know, who does? Did you not get into the head of people who would buy this and figure out if they perceived that there was a problem that you could solve for them and that they would pay enough money for you to be able to make any money on your business? He didn’t know, they didn’t know.
Three questions to ask yourself before you spend any money on your business idea.
Question number one. What problem does it solve?
Question number two. What question does it answer?
And question number three, What desire does it fulfill?
Now, all transactions, all sustainable businesses are problem solving businesses, every one of them. Every one of them are problem solving businesses. So to qualify your idea ask those three questions, and if your business idea does not obviously answer at least one of those questions it’s not a good enough idea to risk your time and your capital on, therefore you need to move on to another idea.
Your dream can easily become a nightmare because business is risky enough, don’t take a foolish risk. Hope so is not a valid strategy. Throwing out money, opening a business, trying to put your idea into real life and hope that something will happen and that will work is not a valid strategy.
If there is no problem-solving, there is no business. So it’s simple enough, and yet so many potential business people never do it. Ask yourself, what problem does this solve, what question does this answer, what desire does this fulfill?
If you cannot readily identify that then you can’t market, because marketing is based on the problem-solving aspect as a benefit to the customer. We will talk about that in a future episode in this series and then next week I’m going to tell you two stories, one happy one, one sad one and what they mean for you about how to structure your business.